Converted by EDGARwiz




 

 


[september302015form10q001.jpg]


UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q


x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE     
SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the Quarterly Period Ended September 30, 2015     

 

or     

¨

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE     
SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the transition period from ____________ to ____________



Commission
File Number

Registrant; State of Incorporation;
Address; and Telephone Number

I.R.S. Employer
Identification No.

 

 

 

1-5324

EVERSOURCE ENERGY
(a Massachusetts voluntary association)
300 Cadwell Drive
Springfield, Massachusetts 01104
Telephone:  (413) 785-5871

04-2147929


0-00404

THE CONNECTICUT LIGHT AND POWER COMPANY
(a Connecticut corporation)
107 Selden Street
Berlin, Connecticut 06037-1616
Telephone:  (860) 665-5000

06-0303850


1-02301

NSTAR ELECTRIC COMPANY
(a Massachusetts corporation)
800 Boylston Street
Boston, Massachusetts 02199
Telephone:  (617) 424-2000

04-1278810


1-6392

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
(a New Hampshire corporation)
Energy Park
780 North Commercial Street
Manchester, New Hampshire 03101-1134
Telephone:  (603) 669-4000

02-0181050


0-7624

WESTERN MASSACHUSETTS ELECTRIC COMPANY
(a Massachusetts corporation)
300 Cadwell Drive
Springfield, Massachusetts 01104
Telephone:  (413) 785-5871

04-1961130




 




























































































Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.


 

Yes

No

 

 

 

 

x

¨


Indicate by check mark whether the registrants have submitted electronically and posted on its corporate Web sites, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrants were required to submit and post such files).


 

Yes

No

 

 

 

 

x

¨


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of "accelerated filer" and "large accelerated filer" in Rule 12b-2 of the Exchange Act.  (Check one):


 

Large
Accelerated Filer

 

Accelerated
Filer

 

Non-accelerated
Filer

 

 

 

 

 

 

Eversource Energy

x

 

¨

 

¨

The Connecticut Light and Power Company

¨

 

¨

 

x

NSTAR Electric Company

¨

 

¨

 

x

Public Service Company of New Hampshire

¨

 

¨

 

x

Western Massachusetts Electric Company

¨

 

¨

 

x


Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act):


 

Yes

No

 

 

 

Eversource Energy

¨

x

The Connecticut Light and Power Company

¨

x

NSTAR Electric Company

¨

x

Public Service Company of New Hampshire

¨

x

Western Massachusetts Electric Company

¨

x


Indicate the number of shares outstanding of each of the issuers' classes of common stock, as of the latest practicable date:


Company - Class of Stock

Outstanding as of October 31, 2015

Eversource Energy
Common shares, $5.00 par value

317,191,249 shares

 

 

The Connecticut Light and Power Company
Common stock, $10.00 par value

6,035,205 shares

 

 

NSTAR Electric Company
Common stock, $1.00 par value

100 shares

 

 

Public Service Company of New Hampshire
Common stock, $1.00 par value

301 shares

 

 

Western Massachusetts Electric Company
Common stock, $25.00 par value

434,653 shares


Eversource Energy holds all of the 6,035,205 shares, 100 shares, 301 shares, and 434,653 shares of the outstanding common stock of The Connecticut Light and Power Company, NSTAR Electric Company, Public Service Company of New Hampshire and Western Massachusetts Electric Company, respectively.


NSTAR Electric Company, Public Service Company of New Hampshire and Western Massachusetts Electric Company each meet the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q, and each is therefore filing this Form 10-Q with the reduced disclosure format specified in General Instruction H(2) of Form 10-Q.


Eversource Energy, The Connecticut Light and Power Company, NSTAR Electric Company, Public Service Company of New Hampshire, and Western Massachusetts Electric Company each separately file this combined Form 10-Q.  Information contained herein relating to any individual registrant is filed by such registrant on its own behalf.  Each registrant makes no representation as to information relating to the other registrants.  



GLOSSARY OF TERMS


The following is a glossary of abbreviations or acronyms that are found in this report:

 

 

Current or former Eversource Energy companies, segments or investments:

Eversource, ES or the Company

Eversource Energy and subsidiaries

Eversource parent or ES parent

Eversource Energy, a public utility holding company

ES parent and other companies

ES parent and other companies are comprised of Eversource parent, Eversource Service and other subsidiaries, which primarily includes our unregulated businesses, HWP Company, The Rocky River Realty Company (a real estate subsidiary), and the consolidated operations of CYAPC and YAEC

CL&P

The Connecticut Light and Power Company

NSTAR Electric

NSTAR Electric Company

PSNH

Public Service Company of New Hampshire

WMECO

Western Massachusetts Electric Company

NSTAR Gas

NSTAR Gas Company

Yankee Gas

Yankee Gas Services Company

ESTV

Eversource Energy Transmission Ventures, Inc., the parent company of NPT and Renewable Properties, Inc.

NPT

Northern Pass Transmission LLC

Eversource Service

Eversource Energy Service Company (effective January 1, 2014 includes the operations of NSTAR Electric & Gas)

NSTAR Electric & Gas

NSTAR Electric & Gas Corporation, a former Eversource Energy service company (effective January 1, 2014 merged into Eversource Energy Service Company)

CYAPC

Connecticut Yankee Atomic Power Company

MYAPC

Maine Yankee Atomic Power Company

YAEC

Yankee Atomic Electric Company

Yankee Companies

CYAPC, YAEC and MYAPC

Regulated companies

The Eversource Regulated companies are comprised of the electric distribution and transmission businesses of CL&P, NSTAR Electric, PSNH, and WMECO, the natural gas distribution businesses of Yankee Gas and NSTAR Gas, the generation activities of PSNH and WMECO, and NPT

 

 

Regulators:

 

DEEP

Connecticut Department of Energy and Environmental Protection

DOE

U.S. Department of Energy

DOER

Massachusetts Department of Energy Resources

DPU

Massachusetts Department of Public Utilities

EPA

U.S. Environmental Protection Agency

FERC

Federal Energy Regulatory Commission

ISO-NE

ISO New England, Inc., the New England Independent System Operator

MA DEP

Massachusetts Department of Environmental Protection

NHPUC

New Hampshire Public Utilities Commission

PURA

Connecticut Public Utilities Regulatory Authority

SEC

U.S. Securities and Exchange Commission

SJC

Supreme Judicial Court of Massachusetts

 

 

Other Terms and Abbreviations:

 

AFUDC

Allowance For Funds Used During Construction

AOCI

Accumulated Other Comprehensive Income/(Loss)

ARO

Asset Retirement Obligation

C&LM

Conservation and Load Management

CfD

Contract for Differences

Clean Air Project

The construction of a wet flue gas desulphurization system, known as "scrubber technology," to reduce mercury emissions of the Merrimack coal-fired generation station in Bow, New Hampshire

CO2

Carbon dioxide

CPSL

Capital Projects Scheduling List

CTA

Competitive Transition Assessment

CWIP

Construction Work in Progress

EPS

Earnings Per Share

ERISA

Employee Retirement Income Security Act of 1974

ES 2014 Form 10-K

The Eversource Energy and Subsidiaries 2014 combined Annual Report on Form 10-K as filed with the SEC

ESOP

Employee Stock Ownership Plan

ESPP

Employee Share Purchase Plan

FERC ALJ

FERC Administrative Law Judge

Fitch

Fitch Ratings

FMCC

Federally Mandated Congestion Charge

FTR

Financial Transmission Rights

GAAP

Accounting principles generally accepted in the United States of America

GSC

Generation Service Charge



i





GSRP

Greater Springfield Reliability Project

GWh

Gigawatt-Hours

HQ

Hydro-Québec, a corporation wholly owned by the Québec government, including its divisions that produce, transmit and distribute electricity in Québec, Canada

HVDC

High voltage direct current

Hydro Renewable Energy

Hydro Renewable Energy, Inc., a wholly owned subsidiary of Hydro-Québec

IPP

Independent Power Producers

ISO-NE Tariff

ISO-NE FERC Transmission, Markets and Services Tariff

kV

Kilovolt

kW

Kilowatt (equal to one thousand watts)

kWh

Kilowatt-Hours (the basic unit of electricity energy equal to one kilowatt of power supplied for one hour)

LBR

Lost Base Revenue

LNG

Liquefied natural gas

LRS

Supplier of last resort service

MGP

Manufactured Gas Plant

MMBtu

One million British thermal units

Moody's

Moody's Investors Services, Inc.

MW

Megawatt

MWh

Megawatt-Hours

NEEWS

New England East-West Solution

Northern Pass

The high voltage direct current transmission line project from Canada into New Hampshire

NOx

Nitrogen oxides

PAM

Pension and PBOP Rate Adjustment Mechanism

PBOP

Postretirement Benefits Other Than Pension

PBOP Plan

Postretirement Benefits Other Than Pension Plan that provides certain retiree benefits, primarily medical, dental and life insurance

PCRBs

Pollution Control Revenue Bonds

Pension Plan

Single uniform noncontributory defined benefit retirement plan

PPA

Pension Protection Act

RECs

Renewable Energy Certificates

Regulatory ROE

The average cost of capital method for calculating the return on equity related to the distribution and generation business segment excluding the wholesale transmission segment

ROE

Return on Equity

RRB

Rate Reduction Bond or Rate Reduction Certificate

RSUs

Restricted share units

S&P

Standard & Poor's Financial Services LLC

SBC

Systems Benefits Charge

SCRC

Stranded Cost Recovery Charge

SERP

Supplemental Executive Retirement Plans and non-qualified defined benefit retirement plans

SIP

Simplified Incentive Plan

SO2

Sulfur dioxide

SS

Standard service

TCAM

Transmission Cost Adjustment Mechanism

TSA

Transmission Service Agreement

UI

The United Illuminating Company





ii


EVERSOURCE ENERGY AND SUBSIDIARIES
THE CONNECTICUT LIGHT AND POWER COMPANY
NSTAR ELECTRIC COMPANY AND SUBSIDIARY
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY
WESTERN MASSACHUSETTS ELECTRIC COMPANY

TABLE OF CONTENTS

 

Page

PART I FINANCIAL INFORMATION

 

 

 

ITEM 1.

Financial Statements (Unaudited)

 

 

 

 

 

Eversource Energy and Subsidiaries (Unaudited)

 

 

Condensed Consolidated Balance Sheets

1

 

Condensed Consolidated Statements of Income

2

 

Condensed Consolidated Statements of Comprehensive Income

2

 

Condensed Consolidated Statements of Cash Flows

3

 

 

 

 

The Connecticut Light and Power Company (Unaudited)

 

 

Condensed Balance Sheets

4

 

Condensed Statements of Income

5

 

Condensed Statements of Comprehensive Income

5

 

Condensed Statements of Cash Flows

6

 

 

 

 

NSTAR Electric Company and Subsidiary (Unaudited)

 

 

Condensed Consolidated Balance Sheets

7

 

Condensed Consolidated Statements of Income

8

 

Condensed Consolidated Statements of Comprehensive Income

8

 

Condensed Consolidated Statements of Cash Flows

9

 

 

 

 

Public Service Company of New Hampshire and Subsidiary (Unaudited)

 

 

Condensed Consolidated Balance Sheets

10

 

Condensed Consolidated Statements of Income

11

 

Condensed Consolidated Statements of Comprehensive Income

11

 

Condensed Consolidated Statements of Cash Flows

12

 

 

 

 

Western Massachusetts Electric Company (Unaudited)

 

 

Condensed Balance Sheets

13

 

Condensed Statements of Income

14

 

Condensed Statements of Comprehensive Income

14

 

Condensed Statements of Cash Flows

15

 

 

 

 

Combined Notes to Condensed Consolidated Financial Statements (Unaudited)

16

 

 

 

ITEM 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

 

 

 

 

 

Eversource Energy and Subsidiaries

32

 

The Connecticut Light and Power Company

46

 

NSTAR Electric Company and Subsidiary

49

 

Public Service Company of New Hampshire and Subsidiary

51

 

Western Massachusetts Electric Company

53

 

 

 

ITEM 3.

Quantitative and Qualitative Disclosures About Market Risk

55

 

 

 

ITEM 4.

Controls and Procedures

55

 

 

 

PART II – OTHER INFORMATION

 

 

 

ITEM 1.

Legal Proceedings

56

 

 

 

ITEM 1A.

Risk Factors

56

 

 

 

ITEM 2.

Unregistered Sales of Equity Securities and Use of Proceeds

56

 

 

 

ITEM 6.

Exhibits

57

 

 

 

SIGNATURES

59




iii





EVERSOURCE ENERGY AND SUBSIDIARIES

 

 

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

(Thousands of Dollars)

2015 

 

2014 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and Cash Equivalents

$

 35,781 

 

$

 38,703 

 

Receivables, Net

 

 928,064 

 

 

 856,346 

 

Unbilled Revenues

 

 197,920 

 

 

 211,758 

 

Taxes Receivable

 

 12,247 

 

 

 337,307 

 

Fuel, Materials and Supplies

 

 302,225 

 

 

 349,664 

 

Regulatory Assets

 

 653,892 

 

 

 672,493 

 

Marketable Securities

 

 119,702 

 

 

 124,173 

 

Prepayments and Other Current Assets

 

 117,857 

 

 

 102,021 

Total Current Assets

 

 2,367,688 

 

 

 2,692,465 

 

 

 

 

 

 

 

 

Property, Plant and Equipment, Net

 

 19,406,025 

 

 

 18,647,041 

 

 

 

 

 

 

 

 

Deferred Debits and Other Assets:

 

 

 

 

 

 

Regulatory Assets

 

 3,951,752 

 

 

 4,054,086 

 

Goodwill

 

 3,519,401 

 

 

 3,519,401 

 

Marketable Securities

 

 476,778 

 

 

 515,025 

 

Other Long-Term Assets

 

 324,382 

 

 

 349,957 

Total Deferred Debits and Other Assets

 

 8,272,313 

 

 

 8,438,469 

 

 

 

 

 

 

 

 

Total Assets

$

 30,046,026 

 

$

 29,777,975 

 

 

 

 

 

 

 

 

LIABILITIES AND CAPITALIZATION

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Notes Payable

$

 1,015,500 

 

$

 956,825 

 

Long-Term Debt - Current Portion

 

 228,883 

 

 

 245,583 

 

Accounts Payable

 

 610,753 

 

 

 868,231 

 

Obligations to Third Party Suppliers

 

 157,798 

 

 

 115,632 

 

Regulatory Liabilities

 

 226,061 

 

 

 235,022 

 

Accumulated Deferred Income Taxes

 

 169,272 

 

 

 160,288 

 

Other Current Liabilities

 

 563,426 

 

 

 552,800 

Total Current Liabilities

 

 2,971,693 

 

 

 3,134,381 

 

 

 

 

 

 

 

 

Deferred Credits and Other Liabilities:

 

 

 

 

 

  

Accumulated Deferred Income Taxes

 

 4,612,828 

 

 

 4,467,473 

 

Regulatory Liabilities

 

 517,595 

 

 

 515,144 

 

Derivative Liabilities

 

 365,692 

 

 

 409,632 

 

Accrued Pension, SERP and PBOP

 

 1,498,346 

 

 

 1,638,558 

 

Other Long-Term Liabilities

 

 872,376 

 

 

 874,387 

Total Deferred Credits and Other Liabilities

 

 7,866,837 

 

 

 7,905,194 

 

 

 

 

 

 

 

 

Capitalization:

 

 

 

 

 

 

Long-Term Debt

 

 8,757,498 

 

 

 8,606,017 

 

 

 

 

 

 

 

 

 

Noncontrolling Interest - Preferred Stock of Subsidiaries

 

 155,568 

 

 

 155,568 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

  Common Shareholders' Equity:

 

 

 

 

 

 

    Common Shares

 

 1,669,313 

 

 

 1,666,796 

 

    Capital Surplus, Paid In

 

 6,260,663 

 

 

 6,235,834 

 

    Retained Earnings

 

 2,747,977 

 

 

 2,448,661 

 

    Accumulated Other Comprehensive Loss

 

 (73,546)

 

 

 (74,009)

 

    Treasury Stock

 

 (309,977)

 

 

 (300,467)

 

Common Shareholders' Equity

 

 10,294,430 

 

 

 9,976,815 

Total Capitalization

 

 19,207,496 

 

 

 18,738,400 

 

 

 

 

 

 

 

 

Total Liabilities and Capitalization

$

 30,046,026 

 

$

 29,777,975 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

 



























































































1



EVERSOURCE ENERGY AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 30,

 

For the Nine Months Ended September 30,

(Thousands of Dollars, Except Share Information)

2015 

 

2014 

 

2015 

 

2014 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues

$

 1,933,105 

 

$

 1,892,532 

 

$

 6,263,597 

 

$

 5,860,736 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Purchased Power, Fuel and Transmission

 

 702,640 

 

 

 716,631 

 

 

 2,549,807 

 

 

 2,318,993 

 

Operations and Maintenance

 

 327,283 

 

 

 344,092 

 

 

 977,306 

 

 

 1,069,015 

 

Depreciation

 

 167,884 

 

 

 153,210 

 

 

 495,389 

 

 

 456,224 

 

Amortization of Regulatory (Liabilities)/Assets, Net

 

 (16,851)

 

 

 (22,531)

 

 

 42,587 

 

 

 31,826 

 

Energy Efficiency Programs

 

 132,107 

 

 

 118,693 

 

 

 380,559 

 

 

 360,228 

 

Taxes Other Than Income Taxes

 

 150,804 

 

 

 141,527 

 

 

 439,221 

 

 

 421,862 

 

 

 

Total Operating Expenses

 

 1,463,867 

 

 

 1,451,622 

 

 

 4,884,869 

 

 

 4,658,148 

Operating Income

 

 469,238 

 

 

 440,910 

 

 

 1,378,728 

 

 

 1,202,588 

Interest Expense

 

 92,534 

 

 

 89,738 

 

 

 279,635 

 

 

 272,208 

Other Income, Net

 

 5,241 

 

 

 11,860 

 

 

 23,866 

 

 

 19,054 

Income Before Income Tax Expense

 

 381,945 

 

 

 363,032 

 

 

 1,122,959 

 

 

 949,434 

Income Tax Expense

 

 144,146 

 

 

 126,539 

 

 

 420,640 

 

 

 345,858 

Net Income

 

 237,799 

 

 

 236,493 

 

 

 702,319 

 

 

 603,576 

Net Income Attributable to Noncontrolling Interests

 

 1,879 

 

 

 1,879 

 

 

 5,639 

 

 

 5,639 

Net Income Attributable to Common Shareholders

$

 235,920 

 

$

 234,614 

 

$

 696,680 

 

$

 597,937 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Common Share

$

 0.74 

 

$

 0.74 

 

$

 2.20 

 

$

 1.89 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Common Share

$

 0.74 

 

$

 0.74 

 

$

 2.19 

 

$

 1.89 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends Declared Per Common Share

$

 0.42 

 

$

 0.39 

 

$

 1.25 

 

$

 1.18 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Common Shares Outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 317,452,212 

 

 

 316,340,691 

 

 

 317,296,107 

 

 

 315,941,904 

 

Diluted

 

 318,405,269 

 

 

 317,554,925 

 

 

 318,396,042 

 

 

 317,186,490 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

 237,799 

 

$

 236,493 

 

$

 702,319 

 

$

 603,576 

Other Comprehensive Income, Net of Tax:

 

 

 

 

 

 

 

 

 

 

 

 

Qualified Cash Flow Hedging Instruments

 

 526 

 

 

 509 

 

 

 1,544 

 

 

 1,528 

 

Changes in Unrealized (Losses)/Gains on Other Securities

 

 (2,803)

 

 

 (216)

 

 

 (3,919)

 

 

 242 

 

Changes in Funded Status of Pension, SERP and PBOP
   Benefit Plans

 

 764 

 

 

 1,042 

 

 

 2,838 

 

 

 4,089 

Other Comprehensive Income, Net of Tax

 

 (1,513)

 

 

 1,335 

 

 

 463 

 

 

 5,859 

Comprehensive Income Attributable to Noncontrolling Interests

 

 (1,879)

 

 

 (1,879)

 

 

 (5,639)

 

 

 (5,639)

Comprehensive Income Attributable to Common Shareholders

$

 234,407 

 

$

 235,949 

 

$

 697,143 

 

$

 603,796 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.



























































































2



EVERSOURCE ENERGY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30,

(Thousands of Dollars)

2015 

 

2014 

 

 

 

 

 

 

 

 

Operating Activities:

 

 

 

 

 

 

Net Income

$

 702,319 

 

$

 603,576 

 

Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:

 

 

 

 

 

 

 

 Depreciation

 

 495,389 

 

 

 456,224 

 

 

 Deferred Income Taxes

 

 153,353 

 

 

 64,755 

 

 

 Pension, SERP and PBOP Expense

 

 71,802 

 

 

 74,296 

 

 

 Pension and PBOP Contributions

 

 (162,880)

 

 

 (74,681)

 

 

 Regulatory Overrecoveries, Net

 

 31,874 

 

 

 290,111 

 

 

 Amortization of Regulatory Assets, Net

 

 42,587 

 

 

 31,826 

 

 

 Proceeds from DOE Damages Claim, Net

 

 - 

 

 

 132,138 

 

 

 Other

 

 (49,548)

 

 

 (17,096)

 

Changes in Current Assets and Liabilities:

 

 

 

 

 

 

 

 Receivables and Unbilled Revenues, Net

 

 (148,442)

 

 

 (66,463)

 

 

 Fuel, Materials and Supplies

 

 47,380 

 

 

 (27,147)

 

 

 Taxes Receivable/Accrued, Net

 

 383,047 

 

 

 26,533 

 

 

 Accounts Payable

 

 (233,660)

 

 

 (69,448)

 

 

 Other Current Assets and Liabilities, Net

 

 8,370 

 

 

 (20,607)

Net Cash Flows Provided by Operating Activities

 

 1,341,591 

 

 

 1,404,017 

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

Investments in Property, Plant and Equipment

 

 (1,177,285)

 

 

 (1,117,493)

 

Proceeds from Sales of Marketable Securities

 

 556,582 

 

 

 388,352 

 

Purchases of Marketable Securities

 

 (535,044)

 

 

 (389,406)

 

Other Investing Activities

 

 (2,769)

 

 

 (4,669)

Net Cash Flows Used in Investing Activities

 

 (1,158,516)

 

 

 (1,123,216)

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

Cash Dividends on Common Shares

 

 (397,363)

 

 

 (356,080)

 

Cash Dividends on Preferred Stock

 

 (5,639)

 

 

 (5,639)

 

(Decrease)/Increase in Notes Payable

 

 (387,575)

 

 

 6,000 

 

Issuance of Long-Term Debt

 

 825,000 

 

 

 650,000 

 

Retirements of Long-Term Debt

 

 (216,700)

 

 

 (576,650)

 

Other Financing Activities

 

 (3,720)

 

 

 (90)

Net Cash Flows Used in Financing Activities

 

 (185,997)

 

 

 (282,459)

Net Decrease in Cash and Cash Equivalents

 

 (2,922)

 

 

 (1,658)

Cash and Cash Equivalents - Beginning of Period

 

 38,703 

 

 

 43,364 

Cash and Cash Equivalents - End of Period

$

 35,781 

 

$

 41,706 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

 

 

 

 

 

 



3





THE CONNECTICUT LIGHT AND POWER COMPANY

 

 

 

 

 

CONDENSED BALANCE SHEETS

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

(Thousands of Dollars)

2015 

 

2014 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash

$

 13,407 

 

$

 2,356 

 

Receivables, Net

 

 425,955 

 

 

 355,140 

 

Accounts Receivable from Affiliated Companies

 

 28,266 

 

 

 16,757 

 

Unbilled Revenues

 

 96,301 

 

 

 102,137 

 

Taxes Receivable

 

 - 

 

 

 116,148 

 

Regulatory Assets

 

 243,293 

 

 

 220,344 

 

Materials and Supplies

 

 44,306 

 

 

 46,664 

 

Prepaid Property Taxes

 

 52,351 

 

 

 15,597 

 

Prepayments and Other Current Assets

 

 16,239 

 

 

 22,225 

Total Current Assets

 

 920,118 

 

 

 897,368 

 

 

 

 

 

 

 

 

Property, Plant and Equipment, Net

 

 7,008,603 

 

 

 6,809,664 

 

 

 

 

 

 

 

 

Deferred Debits and Other Assets:

 

 

 

 

 

 

Regulatory Assets

 

 1,420,974 

 

 

 1,475,508 

 

Other Long-Term Assets

 

 145,031 

 

 

 177,568 

Total Deferred Debits and Other Assets

 

 1,566,005 

 

 

 1,653,076 

 

 

 

 

 

 

 

 

Total Assets

$

 9,494,726 

 

$

 9,360,108 

 

 

 

 

 

 

 

 

LIABILITIES AND CAPITALIZATION

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Notes Payable to Eversource Parent

$

 - 

 

$

 133,400 

 

Long-Term Debt - Current Portion

 

 - 

 

 

 162,000 

 

Accounts Payable

 

 207,366 

 

 

 272,971 

 

Accounts Payable to Affiliated Companies

 

 93,257 

 

 

 65,594 

 

Obligations to Third Party Suppliers

 

 75,659 

 

 

 73,624 

 

Accrued Taxes

 

 47,973 

 

 

 4,091 

 

Regulatory Liabilities

 

 136,393 

 

 

 124,722 

 

Derivative Liabilities

 

 91,372 

 

 

 88,459 

 

Other Current Liabilities

 

 124,504 

 

 

 149,329 

Total Current Liabilities

 

 776,524 

 

 

 1,074,190 

 

 

 

 

 

 

 

 

Deferred Credits and Other Liabilities:

 

 

 

 

 

 

Accumulated Deferred Income Taxes

 

 1,636,831 

 

 

 1,642,805 

 

Regulatory Liabilities

 

 76,864 

 

 

 81,298 

 

Derivative Liabilities

 

 364,691 

 

 

 406,199 

 

Accrued Pension, SERP and PBOP

 

 284,890 

 

 

 273,854 

 

Other Long-Term Liabilities

 

 143,642 

 

 

 148,844 

Total Deferred Credits and Other Liabilities

 

 2,506,918 

 

 

 2,553,000 

 

 

 

 

 

 

 

 

Capitalization:

 

 

 

 

 

 

Long-Term Debt

 

 2,975,316 

 

 

 2,679,951 

 

 

 

 

 

 

 

 

 

Preferred Stock Not Subject to Mandatory Redemption

 

 116,200 

 

 

 116,200 

 

 

 

 

 

 

 

 

 

Common Stockholder's Equity:

 

 

 

 

 

 

    Common Stock

 

 60,352 

 

 

 60,352 

 

    Capital Surplus, Paid In

 

 1,910,651 

 

 

 1,804,869 

 

    Retained Earnings

 

 1,149,500 

 

 

 1,072,477 

 

    Accumulated Other Comprehensive Loss

 

 (735)

 

 

 (931)

 

Common Stockholder's Equity

 

 3,119,768 

 

 

 2,936,767 

Total Capitalization

 

 6,211,284 

 

 

 5,732,918 

 

 

 

 

 

 

 

 

Total Liabilities and Capitalization

$

 9,494,726 

 

$

 9,360,108 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

 

 



























































































4



THE CONNECTICUT LIGHT AND POWER COMPANY

 

 

 

 

 

 

 

 

 

CONDENSED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 30,

 

For the Nine Months Ended September 30,

(Thousands of Dollars)

2015 

 

2014 

 

2015 

 

2014 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues

$

 704,262 

 

$

 695,642 

 

$

 2,175,733 

 

$

 2,017,580 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Purchased Power and Transmission

 

 274,762 

 

 

 255,787 

 

 

 861,562 

 

 

 736,952 

 

Operations and Maintenance

 

 122,280 

 

 

 127,285 

 

 

 358,324 

 

 

 368,562 

 

Depreciation

 

 54,809 

 

 

 46,886 

 

 

 159,903 

 

 

 139,598 

 

Amortization of Regulatory (Liabilities)/Assets, Net

 

 (22,859)

 

 

 13,098 

 

 

 17,917 

 

 

 62,644 

 

Energy Efficiency Programs

 

 42,590 

 

 

 41,399 

 

 

 119,360 

 

 

 119,389 

 

Taxes Other Than Income Taxes

 

 71,563 

 

 

 64,994 

 

 

 201,743 

 

 

 194,105 

 

 

Total Operating Expenses

 

 543,145 

 

 

 549,449 

 

 

 1,718,809 

 

 

 1,621,250 

Operating Income

 

 161,117 

 

 

 146,193 

 

 

 456,924 

 

 

 396,330 

Interest Expense

 

 36,716 

 

 

 38,735 

 

 

 109,463 

 

 

 110,448 

Other Income, Net

 

 2,356 

 

 

 6,456 

 

 

 8,576 

 

 

 10,658 

Income Before Income Tax Expense

 

 126,757 

 

 

 113,914 

 

 

 356,037 

 

 

 296,540 

Income Tax Expense

 

 46,569 

 

 

 30,038 

 

 

 127,845 

 

 

 95,980 

Net Income

$

 80,188 

 

$

 83,876 

 

$

 228,192 

 

$

 200,560 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

 80,188 

 

$

 83,876 

 

$

 228,192 

 

$

 200,560 

Other Comprehensive Income, Net of Tax:

 

 

 

 

 

 

 

 

 

 

 

 

Qualified Cash Flow Hedging Instruments

 

 111 

 

 

 111 

 

 

 333 

 

 

 333 

 

Changes in Unrealized (Losses)/Gains on Other Securities

 

 (98)

 

 

 (7)

 

 

 (137)

 

 

 8 

Other Comprehensive Income, Net of Tax

 

 13 

 

 

 104 

 

 

 196 

 

 

 341 

Comprehensive Income

$

 80,201 

 

$

 83,980 

 

$

 228,388 

 

$

 200,901 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

 

 

 

 

 



























































































5



THE CONNECTICUT LIGHT AND POWER COMPANY

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30,

(Thousands of Dollars)

2015 

 

2014 

 

 

 

 

 

 

 

 

Operating Activities:

 

 

 

 

 

 

Net Income

$

 228,192 

 

$

 200,560 

 

Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:

 

 

 

 

 

 

   Depreciation

 

 159,903 

 

 

 139,598 

 

 

Deferred Income Taxes

 

 (11,011)

 

 

 (14,400)

 

 

Pension, SERP and PBOP Expense, Net of PBOP Contributions

 

 10,654 

 

 

 8,050 

 

 

Regulatory Overrecoveries, Net

 

 12,504 

 

 

 62,929 

 

 

Amortization of Regulatory Assets, Net

 

 17,917 

 

 

 62,644 

 

 

Proceeds from DOE Damages Claim

 

 - 

 

 

 68,610 

 

 

Other

 

 (13,048)

 

 

 (11,290)

 

Changes in Current Assets and Liabilities:

 

 

 

 

 

 

 

Receivables and Unbilled Revenues, Net

 

 (91,842)

 

 

 (87,922)

 

 

Taxes Receivable/Accrued, Net

 

 160,031 

 

 

 39,805 

 

 

Accounts Payable

 

 (20,485)

 

 

 16,984 

 

 

Other Current Assets and Liabilities, Net

 

 (31,044)

 

 

 (2,575)

Net Cash Flows Provided by Operating Activities

 

 421,771 

 

 

 482,993 

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

Investments in Property, Plant and Equipment

 

 (359,339)

 

 

 (371,660)

 

Other Investing Activities

 

 (740)

 

 

 (4,539)

Net Cash Flows Used in Investing Activities

 

 (360,079)

 

 

 (376,199)

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

Cash Dividends on Common Stock

 

 (147,000)

 

 

 (128,400)

 

Cash Dividends on Preferred Stock

 

 (4,169)

 

 

 (4,169)

 

Issuance of Long-Term Debt

 

 300,000 

 

 

 250,000 

 

Retirements of Long-Term Debt

 

 (162,000)

 

 

 (150,000)

 

Decrease in Notes Payable to Eversource Parent

 

 (133,400)

 

 

 (181,900)

 

Capital Contribution from Eversource Parent

 

 105,000 

 

 

 120,000 

 

Other Financing Activities

 

 (9,072)

 

 

 (3,268)

Net Cash Flows Used in Financing Activities

 

 (50,641)

 

 

 (97,737)

Net Increase in Cash

 

 11,051 

 

 

 9,057 

Cash - Beginning of Period

 

 2,356 

 

 

 7,237 

Cash - End of Period

$

 13,407 

 

$

 16,294 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.



6





NSTAR ELECTRIC COMPANY AND SUBSIDIARY

 

 

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

(Thousands of Dollars)

2015 

 

2014 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and Cash Equivalents

$

 2,809 

 

$

 12,773 

 

Receivables, Net

 

 303,969 

 

 

 234,481 

 

Accounts Receivable from Affiliated Companies

 

 17,229 

 

 

 40,353 

 

Unbilled Revenues

 

 43,288 

 

 

 29,741 

 

Taxes Receivable

 

 - 

 

 

 144,601 

 

Materials and Supplies

 

 52,315 

 

 

 74,179 

 

Regulatory Assets

 

 223,520 

 

 

 198,710 

 

Prepayments and Other Current Assets

 

 8,862 

 

 

 10,815 

Total Current Assets

 

 651,992 

 

 

 745,653 

 

 

 

 

 

 

 

 

Property, Plant and Equipment, Net

 

 5,545,082 

 

 

 5,335,436 

 

 

 

 

 

 

 

 

Deferred Debits and Other Assets:

 

 

 

 

 

 

Regulatory Assets

 

 1,179,996 

 

 

 1,179,100 

 

Other Long-Term Assets

 

 60,339 

 

 

 73,051 

Total Deferred Debits and Other Assets

 

 1,240,335 

 

 

 1,252,151 

 

 

 

 

 

 

 

 

Total Assets

$

 7,437,409 

 

$

 7,333,240 

 

 

 

 

 

 

 

 

LIABILITIES AND CAPITALIZATION

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Notes Payable

$

 258,500 

 

$

302,000 

 

Long-Term Debt - Current Portion

 

 200,000 

 

 

4,700 

 

Accounts Payable

 

 172,521 

 

 

217,311 

 

Accounts Payable to Affiliated Companies

 

 25,515 

 

 

63,517 

 

Obligations to Third Party Suppliers

 

 70,607 

 

 

34,824 

 

Renewable Portfolio Standards Compliance Obligations

 

 67,828 

 

 

35,698 

 

Accrued Taxes

 

 66,474 

 

 

4,191 

 

Accumulated Deferred Income Taxes

 

 92,183 

 

 

 55,136 

 

Regulatory Liabilities

 

 12,319 

 

 

 49,611 

 

Other Current Liabilities

 

 88,905 

 

 

 111,800 

Total Current Liabilities

 

 1,054,852 

 

 

 878,788 

 

 

 

 

 

 

 

 

Deferred Credits and Other Liabilities:

 

 

 

 

 

 

Accumulated Deferred Income Taxes

 

 1,546,801 

 

 

 1,527,667 

 

Regulatory Liabilities

 

 267,342 

 

 

 262,738 

 

Accrued Pension, SERP and PBOP

 

 211,891 

 

 

 235,529 

 

Other Long-Term Liabilities

 

 122,026 

 

 

 129,279 

Total Deferred Credits and Other Liabilities

 

 2,148,060 

 

 

 2,155,213 

 

 

 

 

 

 

 

 

Capitalization:

 

 

 

 

 

 

Long-Term Debt

 

 1,592,727 

 

 

 1,792,712 

 

 

 

 

 

 

 

 

 

Preferred Stock Not Subject to Mandatory Redemption

 

 43,000 

 

 

 43,000 

 

 

 

 

 

 

 

 

 

Common Stockholder's Equity:

 

 

 

 

 

 

    Common Stock

 

 - 

 

 

 - 

 

    Capital Surplus, Paid In

 

 995,378 

 

 

 994,130 

 

    Retained Earnings

 

 1,603,134 

 

 

 1,468,955 

 

    Accumulated Other Comprehensive Income

 

 258 

 

 

 442 

 

Common Stockholder's Equity

 

 2,598,770 

 

 

 2,463,527 

Total Capitalization

 

 4,234,497 

 

 

 4,299,239 

 

 

 

 

 

 

 

 

Total Liabilities and Capitalization

$

 7,437,409 

 

$

 7,333,240 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

 



























































































7



NSTAR ELECTRIC COMPANY AND SUBSIDIARY

 

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 30,

 

For the Nine Months Ended September 30,

(Thousands of Dollars)

2015 

 

2014 

 

2015 

 

2014 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues

$

 750,724 

 

$

 727,909 

 

$

 2,134,728 

 

$

 1,955,609 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Purchased Power and Transmission

 

 299,040 

 

 

 317,784 

 

 

 984,035 

 

 

 879,773 

 

Operations and Maintenance

 

 83,486 

 

 

 79,705 

 

 

 228,740 

 

 

 244,610 

 

Depreciation

 

 49,101 

 

 

 47,455 

 

 

 146,818 

 

 

 140,996 

 

Amortization of Regulatory Assets/(Liabilities), Net

 

 2,257 

 

 

 (15,063)

 

 

 (10,643)

 

 

 (916)

 

Energy Efficiency Programs

 

 67,693 

 

 

 56,915 

 

 

 164,843 

 

 

 145,499 

 

Taxes Other Than Income Taxes

 

 34,982 

 

 

 34,513 

 

 

 95,821 

 

 

 99,121 

 

 

Total Operating Expenses

 

 536,559 

 

 

 521,309 

 

 

 1,609,614 

 

 

 1,509,083 

Operating Income

 

 214,165 

 

 

 206,600 

 

 

 525,114 

 

 

 446,526 

Interest Expense

 

 18,992 

 

 

 17,338 

 

 

 57,218 

 

 

 59,091 

Other Income, Net

 

 513 

 

 

 3,287 

 

 

 3,649 

 

 

 3,011 

Income Before Income Tax Expense

 

 195,686 

 

 

 192,549 

 

 

 471,545 

 

 

 390,446 

Income Tax Expense

 

 77,062 

 

 

 76,975 

 

 

 187,397 

 

 

 156,655 

Net Income

$

 118,624 

 

$

 115,574 

 

$

 284,148 

 

$

 233,791 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

 118,624 

 

$

 115,574 

 

$

 284,148 

 

$

 233,791 

Other Comprehensive Loss, Net of Tax:

 

 

 

 

 

 

 

 

 

 

 

 

Changes in Funded Status of SERP Benefit Plan

 

 (2)

 

 

 - 

 

 

 (184)

 

 

 - 

Other Comprehensive Loss, Net of Tax

 

 (2)

 

 

 - 

 

 

 (184)

 

 

 - 

Comprehensive Income

$

 118,622 

 

$

 115,574 

 

$

 283,964 

 

$

 233,791 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

 



























































































8



NSTAR ELECTRIC COMPANY AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30,

(Thousands of Dollars)

2015 

 

2014 

 

 

 

 

 

 

 

 

Operating Activities:

 

 

 

 

 

 

Net Income

$

 284,148 

 

$

 233,791 

 

Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:

 

 

 

 

 

 

 

 Depreciation

 

 146,818 

 

 

 140,996 

 

 

 Deferred Income Taxes

 

 54,188 

 

 

 (39,399)

 

 

 Pension and PBOP Contributions, Net of Pension, SERP and PBOP Expense

 

 (1,138)

 

 

 (11,046)

 

 

 Regulatory (Under)/Over Recoveries, Net

 

 (48,903)

 

 

 155,357 

 

 

 Amortization of Regulatory Liabilities, Net

 

 (10,643)

 

 

 (916)

 

 

 Proceeds from DOE Damages Claim  

 

 - 

 

 

 30,193 

 

 

 Other

 

 (34,223)

 

 

 (41,601)

 

Changes in Current Assets and Liabilities:

 

 

 

 

 

 

 

 Receivables and Unbilled Revenues, Net

 

 (107,711)

 

 

 (47,770)

 

 

 Materials and Supplies

 

 21,863 

 

 

 (20,837)

 

 

 Taxes Receivable/Accrued, Net

 

 207,516 

 

 

 60,252 

 

 

 Accounts Payable

 

 (41,447)

 

 

 (40,594)

 

 

 Accounts Receivable from/Payable to Affiliates, Net

 

 (14,878)

 

 

 66,758 

 

 

 Other Current Assets and Liabilities, Net

 

 46,671 

 

 

 32,340 

Net Cash Flows Provided by Operating Activities

 

 502,261 

 

 

 517,524 

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

Investments in Property, Plant and Equipment

 

 (314,055)

 

 

 (309,248)

Net Cash Flows Used in Investing Activities

 

 (314,055)

 

 

 (309,248)

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

Cash Dividends on Common Stock

 

 (148,500)

 

 

 (253,000)

 

Cash Dividends on Preferred Stock

 

 (1,470)

 

 

 (1,470)

 

(Decrease)/Increase in Notes Payable

 

 (43,500)

 

 

 56,000 

 

Issuance of Long-Term Debt

 

 - 

 

 

 300,000 

 

Retirements of Long-Term Debt

 

 (4,700)

 

 

 (301,650)

 

Other Financing Activities

 

 - 

 

 

 (5,137)

Net Cash Flows Used in Financing Activities

 

 (198,170)

 

 

 (205,257)

Net (Decrease)/Increase in Cash and Cash Equivalents

 

 (9,964)

 

 

 3,019 

Cash and Cash Equivalents - Beginning of Period

 

 12,773 

 

 

 8,021 

Cash and Cash Equivalents - End of Period

$

 2,809 

 

$

 11,040 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.



9





PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY

 

 

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

(Thousands of Dollars)

2015 

 

2014 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash

$

 2,103 

 

$

 489 

 

Receivables, Net

 

 91,700 

 

 

 80,151 

 

Accounts Receivable from Affiliated Companies

 

 14,630 

 

 

 3,194 

 

Unbilled Revenues

 

 34,932 

 

 

 40,181 

 

Fuel, Materials and Supplies

 

 143,983 

 

 

 148,139 

 

Regulatory Assets

 

 89,513 

 

 

 111,705 

 

Prepayments and Other Current Assets

 

 22,125 

 

 

 42,392 

Total Current Assets

 

 398,986 

 

 

 426,251 

 

 

 

 

 

 

 

 

Property, Plant and Equipment, Net

 

 2,768,206 

 

 

 2,635,844 

 

 

 

 

 

 

 

 

Deferred Debits and Other Assets:

 

 

 

 

 

 

Regulatory Assets

 

 272,360 

 

 

 293,115 

 

Other Long-Term Assets

 

 35,075 

 

 

 39,228 

Total Deferred Debits and Other Assets

 

 307,435 

 

 

 332,343 

 

 

 

 

 

 

 

 

Total Assets

 $

 3,474,627 

 

 $

 3,394,438 

 

 

 

 

 

 

 

 

LIABILITIES AND CAPITALIZATION

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Notes Payable to Eversource Parent

$

 137,300 

 

$

 90,500 

 

Accounts Payable

 

 76,330 

 

 

 93,349 

 

Accounts Payable to Affiliated Companies

 

 25,239 

 

 

 33,734 

 

Regulatory Liabilities

 

 11,338 

 

 

 16,044 

 

Accumulated Deferred Income Taxes

 

 34,699 

 

 

 36,164 

 

Other Current Liabilities

 

 47,589 

 

 

 38,969 

Total Current Liabilities

 

 332,495 

 

 

 308,760 

 

 

 

 

 

 

 

 

Deferred Credits and Other Liabilities:

 

 

 

 

 

 

Accumulated Deferred Income Taxes

 

 629,055 

 

 

 587,292 

 

Regulatory Liabilities

 

 49,680 

 

 

 51,372 

 

Accrued Pension, SERP and PBOP

 

 97,167 

 

 

 93,243 

 

Other Long-Term Liabilities

 

 48,543 

 

 

 50,155 

Total Deferred Credits and Other Liabilities

 

 824,445 

 

 

 782,062 

 

 

 

 

 

 

 

 

Capitalization:

 

 

 

 

 

 

Long-Term Debt

 

 1,076,336 

 

 

 1,076,286 

 

 

 

 

 

 

 

 

 

Common Stockholder's Equity:

 

 

 

 

 

 

    Common Stock

 

 - 

 

 

 - 

 

    Capital Surplus, Paid In

 

 748,634 

 

 

 748,240 

 

    Retained Earnings

 

 499,450 

 

 

 486,459 

 

    Accumulated Other Comprehensive Loss

 

 (6,733)

 

 

 (7,369)

 

Common Stockholder's Equity

 

 1,241,351 

 

 

 1,227,330 

Total Capitalization

 

 2,317,687 

 

 

 2,303,616 

 

 

 

 

 

 

 

 

Total Liabilities and Capitalization

$

 3,474,627 

 

$

 3,394,438 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

 

 

 

 

 

 

 



























































































10



PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 30,

 

For the Nine Months Ended September 30,

(Thousands of Dollars)

2015 

 

2014 

 

2015 

 

2014 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues

$

 234,364 

 

$

 223,664 

 

$

 761,086 

 

$

 735,123 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Purchased Power, Fuel and Transmission

 

 53,017 

 

 

 64,397 

 

 

 200,533 

 

 

 247,992 

 

Operations and Maintenance

 

 65,190 

 

 

 65,563 

 

 

 200,085 

 

 

 198,025 

 

Depreciation

 

 26,592 

 

 

 24,568 

 

 

 77,989 

 

 

 73,247 

 

Amortization of Regulatory Assets/(Liabilities), Net

 

 1,967 

 

 

 (9,734)

 

 

 29,148 

 

 

 (17,565)

 

Energy Efficiency Programs

 

 3,873 

 

 

 3,766 

 

 

 11,001 

 

 

 10,897 

 

Taxes Other Than Income Taxes

 

 20,104 

 

 

 18,702 

 

 

 61,435 

 

 

 53,051 

 

 

Total Operating Expenses

 

 170,743 

 

 

 167,262 

 

 

 580,191 

 

 

 565,647 

Operating Income

 

 63,621 

 

 

 56,402 

 

 

 180,895 

 

 

 169,476 

Interest Expense

 

 11,647 

 

 

 11,024 

 

 

 34,582 

 

 

 33,995 

Other Income, Net

 

 685 

 

 

 461 

 

 

 2,313 

 

 

 1,673 

Income Before Income Tax Expense

 

 52,659 

 

 

 45,839 

 

 

 148,626 

 

 

 137,154 

Income Tax Expense

 

 20,158 

 

 

 17,603 

 

 

 56,135 

 

 

 52,199 

Net Income

$

 32,501 

 

$

 28,236 

 

$

 92,491 

 

$

 84,955 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

 32,501 

 

$

 28,236 

 

$

 92,491 

 

$

 84,955 

Other Comprehensive Income, Net of Tax:

 

 

 

 

 

 

 

 

 

 

 

 

Qualified Cash Flow Hedging Instruments

 

 291 

 

 

290 

 

 

 872 

 

 

871 

 

Changes in Unrealized (Losses)/Gains on Other Securities

 

 (169)

 

 

 (13)

 

 

 (236)

 

 

 14 

Other Comprehensive Income, Net of Tax

 

 122 

 

 

277 

 

 

 636 

 

 

885 

Comprehensive Income

$

 32,623 

 

$

 28,513 

 

$

 93,127 

 

$

 85,840 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

 



























































































11



PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30,

(Thousands of Dollars)

2015 

 

2014 

 

 

 

 

 

 

 

 

Operating Activities:

 

 

 

 

 

 

Net Income

$

 92,491 

 

$

 84,955 

 

Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:

 

 

 

 

 

 

 

Depreciation

 

 77,989 

 

 

 73,247 

 

 

Deferred Income Taxes

 

 42,563 

 

 

 67,827 

 

 

Regulatory Overrecoveries, Net

 

 2,639 

 

 

 16,813 

 

 

Amortization of Regulatory Assets/(Liabilities), Net

 

 29,148 

 

 

 (17,565)

 

 

Proceeds from DOE Damages Claim

 

 - 

 

 

 14,453 

 

 

Other

 

 10,894 

 

 

 10,834 

 

Changes in Current Assets and Liabilities:

 

 

 

 

 

 

 

 Receivables and Unbilled Revenues, Net

 

 (25,126)

 

 

 (7,467)

 

 

 Fuel, Materials and Supplies

 

 4,156 

 

 

 (17,350)

 

 

 Taxes Receivable/Accrued, Net

 

 9,026 

 

 

 (24,108)

 

 

 Accounts Payable

 

 (20,058)

 

 

 (9,297)

 

 

 Other Current Assets and Liabilities, Net

 

 20,141 

 

 

 13,470 

Net Cash Flows Provided by Operating Activities

 

 243,863 

 

 

 205,812 

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

Investments in Property, Plant and Equipment

 

 (209,522)

 

 

 (170,127)

 

Other Investing Activities

 

 241 

 

 

 (148)

Net Cash Flows Used in Investing Activities

 

 (209,281)

 

 

 (170,275)

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

Cash Dividends on Common Stock

 

 (79,500)

 

 

 (49,500)

 

Increase in Notes Payable to Eversource Parent

 

 46,800 

 

 

 66,800 

 

Retirements of Long-Term Debt

 

 - 

 

 

 (50,000)

 

Other Financing Activities

 

 (268)

 

 

 (217)

Net Cash Flows Used in Financing Activities

 

 (32,968)

 

 

 (32,917)

Net Increase in Cash

 

 1,614 

 

 

 2,620 

Cash - Beginning of Period

 

 489 

 

 

 130 

Cash - End of Period

$

 2,103 

 

$

 2,750 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.



12





WESTERN MASSACHUSETTS ELECTRIC COMPANY

 

 

 

 

 

CONDENSED BALANCE SHEETS

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

(Thousands of Dollars)

2015 

 

2014 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash

$

 658 

 

$

 - 

 

Receivables, Net

 

 62,889 

 

 

 51,066 

 

Accounts Receivable from Affiliated Companies

 

 24,221 

 

 

 7,851 

 

Unbilled Revenues

 

 14,517 

 

 

 15,146 

 

Taxes Receivable

 

 49 

 

 

 18,126 

 

Regulatory Assets

 

 48,805 

 

 

 51,923 

 

Marketable Securities

 

 40,459 

 

 

 28,658 

 

Prepayments and Other Current Assets

 

 6,983 

 

 

 7,607 

Total Current Assets

 

 198,581 

 

 

 180,377 

 

 

 

 

 

 

 

 

Property, Plant and Equipment, Net

 

 1,531,705 

 

 

 1,461,321 

 

 

 

 

 

 

 

 

Deferred Debits and Other Assets:

 

 

 

 

 

 

Regulatory Assets

 

 133,697 

 

 

 146,307 

 

Marketable Securities

 

 17,888 

 

 

 29,452 

 

Other Long-Term Assets

 

 26,709 

 

 

 22,018 

Total Deferred Debits and Other Assets

 

 178,294 

 

 

 197,777 

 

 

 

 

 

 

 

 

Total Assets

$

 1,908,580 

 

$

 1,839,475 

 

 

 

 

 

 

 

 

LIABILITIES AND CAPITALIZATION

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Notes Payable to Eversource Parent

$

 126,200 

 

$

 21,400 

 

Long-Term Debt - Current Portion

 

 - 

 

 

 50,000 

 

Accounts Payable

 

 33,960 

 

 

 53,732 

 

Accounts Payable to Affiliated Companies

 

 21,496 

 

 

 14,328 

 

Regulatory Liabilities

 

 24,267 

 

 

 22,486 

 

Accumulated Deferred Income Taxes

 

 13,403 

 

 

 18,089 

 

Other Current Liabilities

 

 28,961 

 

 

 24,080 

Total Current Liabilities

 

 248,287 

 

 

 204,115 

 

 

 

 

 

 

 

 

Deferred Credits and Other Liabilities:

 

 

 

 

 

 

Accumulated Deferred Income Taxes

 

 422,753 

 

 

 416,822 

 

Regulatory Liabilities

 

 11,926 

 

 

 10,835 

 

Accrued Pension, SERP and PBOP

 

 18,320 

 

 

 17,705 

 

Other Long-Term Liabilities

 

 36,849 

 

 

 33,747 

Total Deferred Credits and Other Liabilities

 

 489,848 

 

 

 479,109 

 

 

 

 

 

 

 

 

Capitalization:

 

 

 

 

 

 

Long-Term Debt

 

 577,781 

 

 

 578,471 

 

 

 

 

 

 

 

 

 

Common Stockholder's Equity:

 

 

 

 

 

 

    Common Stock

 

 10,866 

 

 

 10,866 

 

    Capital Surplus, Paid In

 

 391,398 

 

 

 391,256 

 

    Retained Earnings

 

 193,344 

 

 

 178,834 

 

    Accumulated Other Comprehensive Loss

 

 (2,944)

 

 

 (3,176)

 

    Common Stockholder's Equity

 

 592,664 

 

 

 577,780 

Total Capitalization

 

 1,170,445 

 

 

 1,156,251 

 

 

 

 

 

 

 

 

Total Liabilities and Capitalization

$

 1,908,580 

 

$

 1,839,475 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.   

 

 

 



























































































13



WESTERN MASSACHUSETTS ELECTRIC COMPANY

 

 

 

 

 

 

 

 

 

CONDENSED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 30,

 

For the Nine Months Ended September 30,

(Thousands of Dollars)

2015 

 

2014 

 

2015 

 

2014 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues

$

 125,093 

 

$

 118,145 

 

$

 403,151 

 

$

 363,843 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Purchased Power and Transmission

 

 36,465 

 

 

 43,926 

 

 

 149,182 

 

 

 130,977 

 

Operations and Maintenance

 

 21,762 

 

 

 20,820 

 

 

 61,651 

 

 

 67,085 

 

Depreciation

 

 11,196 

 

 

 10,506 

 

 

 32,420 

 

 

 31,144 

 

Amortization of Regulatory Assets/(Liabilities), Net

 

 3,930 

 

 

 (8,519)

 

 

 11,194 

 

 

 (7,778)

 

Energy Efficiency Programs

 

 12,107 

 

 

 10,983 

 

 

 32,701 

 

 

 33,096 

 

Taxes Other Than Income Taxes

 

 9,599 

 

 

 9,200 

 

 

 28,430 

 

 

 25,679 

 

 

Total Operating Expenses

 

 95,059 

 

 

 86,916 

 

 

 315,578 

 

 

 280,203 

Operating Income

 

 30,034 

 

 

 31,229 

 

 

 87,573 

 

 

 83,640 

Interest Expense

 

 5,901 

 

 

 6,576 

 

 

 19,014 

 

 

 18,929 

Other Income, Net

 

 587 

 

 

 502 

 

 

 2,406 

 

 

 1,670 

Income Before Income Tax Expense

 

 24,720 

 

 

 25,155 

 

 

 70,965 

 

 

 66,381 

Income Tax Expense

 

 9,749 

 

 

 10,490 

 

 

 28,555 

 

 

 26,596 

Net Income

$

 14,971 

 

$

 14,665 

 

$

 42,410 

 

$

 39,785 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.       

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

 14,971 

 

$

 14,665 

 

$

 42,410 

 

$

 39,785 

Other Comprehensive Income, Net of Tax:

 

 

 

 

 

 

 

 

 

 

 

 

Qualified Cash Flow Hedging Instruments

 

 101 

 

 

85 

 

 

 270 

 

 

254 

 

Changes in Unrealized (Losses)/Gains on Other Securities

 

 (27)

 

 

 (2)

 

 

 (38)

 

 

 2 

Other Comprehensive Income, Net of Tax

 

 74 

 

 

 83 

 

 

 232 

 

 

 256 

Comprehensive Income

$

 15,045 

 

$

 14,748 

 

$

 42,642 

 

$

 40,041 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.       

 

 

 

 

 

 



























































































14



WESTERN MASSACHUSETTS ELECTRIC COMPANY

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30,

(Thousands of Dollars)

2015 

 

2014 

 

 

 

 

 

 

 

 

Operating Activities:

 

 

 

 

 

 

Net Income

$

 42,410 

 

$

 39,785 

 

Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:

 

 

 

 

 

 

 

 Depreciation

 

 32,420 

 

 

 31,144 

 

 

 Deferred Income Taxes

 

 5,531 

 

 

 13,479 

 

 

 Regulatory Overrecoveries, Net

 

 4,024 

 

 

 33,630 

 

 

 Amortization of Regulatory Assets/(Liabilities), Net

 

 11,194 

 

 

 (7,778)

 

 

 Proceeds from DOE Damages Claim

 

 - 

 

 

 18,883 

 

 

 Other

 

 (4,500)

 

 

 615 

 

Changes in Current Assets and Liabilities:

 

 

 

 

 

 

 

 Receivables and Unbilled Revenues, Net

 

 (32,664)

 

 

 36,075 

 

 

 Taxes Receivable/Accrued, Net

 

 24,064 

 

 

 (15,831)

 

 

 Accounts Payable

 

 (14,018)

 

 

 (12,847)

 

 

 Other Current Assets and Liabilities, Net

 

 (463)

 

 

 (16,551)

Net Cash Flows Provided by Operating Activities

 

 67,998 

 

 

 120,604 

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

Investments in Property, Plant and Equipment

 

 (93,705)

 

 

 (82,546)

 

Proceeds from Sales of Marketable Securities

 

 71,110 

 

 

 58,788 

 

Purchases of Marketable Securities

 

 (71,625)

 

 

 (59,280)

Net Cash Flows Used in Investing Activities

 

 (94,220)

 

 

 (83,038)

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

Cash Dividends on Common Stock

 

 (27,900)

 

 

 (49,000)

 

Increase in Notes Payable to Eversource Parent

 

 104,800 

 

 

 13,200 

 

Retirements of Long-Term Debt

 

 (50,000)

 

 

 - 

 

Other Financing Activities

 

 (20)

 

 

 (29)

Net Cash Flows Provided by/(Used in) Financing Activities

 

 26,880 

 

 

 (35,829)

Net Increase in Cash

 

 658 

 

 

 1,737 

Cash - Beginning of Period

 

 - 

 

 

 - 

Cash - End of Period

$

 658 

 

$

 1,737 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.



15


EVERSOURCE ENERGY AND SUBSIDIARIES

THE CONNECTICUT LIGHT AND POWER COMPANY

NSTAR ELECTRIC COMPANY AND SUBSIDIARY

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARY

WESTERN MASSACHUSETTS ELECTRIC COMPANY


COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


Refer to the Glossary of Terms included in this combined Quarterly Report on Form 10-Q for abbreviations and acronyms used throughout the combined notes to the unaudited condensed consolidated financial statements.


1.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


A.

Basis of Presentation

Eversource Energy is a public utility holding company primarily engaged through its wholly owned regulated utility subsidiaries in the energy delivery business.  Eversource Energy's wholly owned regulated utility subsidiaries consist of CL&P, NSTAR Electric, PSNH, WMECO, Yankee Gas and NSTAR Gas.  Eversource provides energy delivery service to approximately 3.6 million electric and natural gas customers through these six regulated utilities in Connecticut, Massachusetts and New Hampshire.  


On April 30, 2015, the Company's legal name was changed from Northeast Utilities to Eversource Energy.  CL&P, NSTAR Electric, PSNH and WMECO are each doing business as Eversource Energy.  


The unaudited condensed consolidated financial statements of Eversource, NSTAR Electric and PSNH include the accounts of each of their respective subsidiaries.  Intercompany transactions have been eliminated in consolidation.  The accompanying unaudited condensed consolidated financial statements of Eversource, NSTAR Electric and PSNH and the unaudited condensed financial statements of CL&P and WMECO are herein collectively referred to as the "financial statements."


The combined notes to the financial statements have been prepared pursuant to the rules and regulations of the SEC.  Certain information and footnote disclosures included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations.  The accompanying financial statements should be read in conjunction with the entirety of this combined Quarterly Report on Form 10-Q, the first and second quarter 2015 combined Quarterly Report on Form 10-Q and the 2014 combined Annual Report on Form 10-K of Eversource, CL&P, NSTAR Electric, PSNH and WMECO, which were filed with the SEC.  The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.


The financial statements contain, in the opinion of management, all adjustments (including normal, recurring adjustments) necessary to present fairly Eversource's, CL&P's, NSTAR Electric's, PSNH's and WMECO's financial position as of September 30, 2015 and December 31, 2014, the results of operations and comprehensive income for the three and nine months ended September 30, 2015 and 2014, and the cash flows for the nine months ended September 30, 2015 and 2014.  The results of operations and comprehensive income for the three and nine months ended September 30, 2015 and 2014 and the cash flows for the nine months ended September 30, 2015 and 2014 are not necessarily indicative of the results expected for a full year.  


Eversource consolidates CYAPC and YAEC because CL&P's, NSTAR Electric's, PSNH's and WMECO's combined ownership interest in each of these entities is greater than 50 percent.  Intercompany transactions between CL&P, NSTAR Electric, PSNH and WMECO and the CYAPC and YAEC companies have been eliminated in consolidation of the Eversource financial statements.  


Eversource's utility subsidiaries' distribution (including generation) and transmission businesses are subject to rate-regulation that is based on cost recovery and meets the criteria for application of accounting guidance for entities with rate-regulated operations, which considers the effect of regulation on the differences in the timing of the recognition of certain revenues and expenses from those of other businesses and industries.  See Note 2, "Regulatory Accounting," for further information.


Certain reclassifications of prior period data were made in the accompanying financial statements to conform to the current period presentation.


B.

Accounting Standards

Accounting Standards Issued but not Yet Effective:  In May 2014, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers, which amends existing revenue recognition guidance and is required to be applied retrospectively (either to each reporting period presented or cumulatively at the date of initial application).  In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers – Deferral of the Effective Date, as a result of which ASU 2014-09 is required to be applied in the first quarter of 2018, with 2017 application permitted.  The Company is reviewing the requirements of ASU 2014-09 and will implement the standard in the first quarter of 2018.  The ASU is not expected to have a material impact on the financial statements of Eversource, CL&P, NSTAR Electric, PSNH or WMECO.


In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, that changes the balance sheet presentation of debt issuance costs.  Under the standard, issuance costs related to debt will be presented on the balance sheet as a direct deduction from the carrying amount of the debt liability rather than as a deferred cost as required by current guidance.  The new accounting guidance is effective for interim and annual periods beginning in the first quarter of 2016 with early adoption permitted.  Upon adoption, an entity must apply the new guidance retrospectively to all prior periods presented in the financial statements.  The Company intends to adopt the new guidance at December 31, 2015.  



16


Management does not expect the adoption of this standard to have a material effect on the financial statements of Eversource, CL&P, NSTAR Electric, PSNH or WMECO.


C.

Provision for Uncollectible Accounts

Eversource, including CL&P, NSTAR Electric, PSNH and WMECO, presents its receivables at estimated net realizable value by maintaining a provision for uncollectible accounts.  This provision is determined based upon a variety of judgments and factors, including the application of an estimated uncollectible percentage to each receivable aging category.  The estimate is based upon historical collection and write-off experience and management's assessment of collectability from customers.  Management continuously assesses the collectability of receivables and adjusts collectability estimates based on actual experience.  Receivable balances are written off against the provision for uncollectible accounts when the accounts are terminated and these balances are deemed to be uncollectible.


The PURA allows CL&P and Yankee Gas to accelerate the recovery of accounts receivable balances attributable to qualified customers under financial or medical duress (uncollectible hardship accounts receivable) outstanding for greater than 180 days and 90 days, respectively.  The DPU allows WMECO to also recover in rates amounts associated with certain uncollectible hardship accounts receivable.  Uncollectible customer account balances, which are expected to be recovered in rates, are included in Regulatory Assets or Other Long-Term Assets.


The total provision for uncollectible accounts and for uncollectible hardship accounts, which is included in the total provision, are included in Receivables, Net on the balance sheets, and were as follows:


 

 

 

Total Provision for Uncollectible Accounts

 

Uncollectible Hardship

(Millions of Dollars)

 

As of September 30, 2015

 

As of December 31, 2014

 

As of September 30, 2015

 

As of December 31, 2014

Eversource

 

$

185.8 

 

$

175.3 

 

$

86.6 

 

$

91.5 

CL&P

 

 

79.5 

 

 

84.3 

 

 

64.9 

 

 

74.0 

NSTAR Electric

 

 

46.4 

 

 

40.7 

 

 

 - 

 

 

 - 

PSNH

 

 

9.4 

 

 

7.7 

 

 

 - 

 

 

 - 

WMECO

 

 

13.2 

 

 

9.9 

 

 

7.7 

 

 

6.2 


D.

Fair Value Measurements

Fair value measurement guidance is applied to derivative contracts that are not elected or designated as "normal purchases or normal sales" (normal) and to the marketable securities held in trusts.  Fair value measurement guidance is also applied to valuations of the investments used to calculate the funded status of pension and PBOP plans and nonrecurring fair value measurements of nonfinancial assets such as goodwill and AROs, and is also used to estimate the fair value of preferred stock and long-term debt.


Fair Value Hierarchy:  In measuring fair value, Eversource uses observable market data when available in order to minimize the use of unobservable inputs.  Inputs used in fair value measurements are categorized into three fair value hierarchy levels for disclosure purposes.  The entire fair value measurement is categorized based on the lowest level of input that is significant to the fair value measurement.  Eversource evaluates the classification of assets and liabilities measured at fair value on a quarterly basis, and Eversource's policy is to recognize transfers between levels of the fair value hierarchy as of the end of the reporting period.  The three levels of the fair value hierarchy are described below:


Level 1 - Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities as of the reporting date.  Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.  


Level 2 - Inputs are quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs are observable.


Level 3 - Quoted market prices are not available.  Fair value is derived from valuation techniques in which one or more significant inputs or assumptions are unobservable.  Where possible, valuation techniques incorporate observable market inputs that can be validated to external sources such as industry exchanges, including prices of energy and energy-related products.  


Determination of Fair Value:  The valuation techniques and inputs used in Eversource's fair value measurements are described in Note 4, "Derivative Instruments," Note 5, "Marketable Securities," and Note 9, "Fair Value of Financial Instruments," to the financial statements.


E.

Other Income, Net

Items included within Other Income, Net on the statements of income primarily consist of investment income/(loss), interest income, AFUDC related to equity funds, and equity in earnings.  Investment income/(loss) primarily relates to debt and equity securities held in trust.  For further information, see Note 5, "Marketable Securities," to the financial statements.  


F.

Other Taxes

Gross receipts taxes levied by the state of Connecticut are collected by CL&P and Yankee Gas from their respective customers.  These gross receipts taxes are shown separately with collections in Operating Revenues and payments in Taxes Other Than Income Taxes on the statements of income as follows:


 

For the Three Months Ended

 

For the Nine Months Ended

(Millions of Dollars)

September 30, 2015

 

September 30, 2014

 

September 30, 2015

 

September 30, 2014

Eversource

$

37.8 

 

$

 35.0 

 

$

112.9 

 

$

 114.6 

CL&P

 

35.5 

 

 

 32.5 

 

 

98.0 

 

 

 99.0 


Certain sales taxes are collected by Eversource's companies that serve customers in Connecticut and Massachusetts as agents for state and local governments and are recorded on a net basis with no impact on the statements of income.   



17



G.

Supplemental Cash Flow Information

Non-cash investing activities include plant additions included in Accounts Payable as follows:

 

(Millions of Dollars)

As of September 30, 2015

 

As of September 30, 2014

Eversource

$

160.7 

 

 

128.9 

CL&P

 

46.0 

 

 

52.2 

NSTAR Electric

 

31.2 

 

 

18.1 

PSNH

 

33.8 

 

 

21.0 

WMECO

 

15.5 

 

 

10.0 


H.

Severance Benefits

Eversource recorded severance benefit expense of $1 million and $0.7 million for the three months ended September 30, 2015 and 2014, respectively, and $2.6 million and $6.5 million for the nine months ended September 30, 2015 and 2014, respectively, in connection with reorganizational and cost saving initiatives, and, in 2014, the partial outsourcing of information technology functions.  As of September 30, 2015 and December 31, 2014, the severance accrual totaled $7.1 million and $10.4 million, respectively, and was included in Other Current Liabilities on the balance sheets.  


I.

Income Taxes

Income tax expense is estimated for each of the jurisdictions in which Eversource operates and is recorded on the quarter using an estimated annualized effective tax rate.  This process to record income tax expense involves estimating current and deferred income tax expense or benefit and the impact of temporary differences resulting from differing treatment of items for financial reporting and income tax return reporting purposes.  Such differences are the result of timing of the deduction for expenses, as well as any impact of permanent differences, non-tax deductible expenses, or other items that directly impact the income tax return as a result of a regulatory activity (flow-through items).  The temporary differences and flow-through items result in deferred tax assets and liabilities that are included in the balance sheets.


Part of the annual process in making adjustments to these estimates is reconciling the provision for income taxes made during the income tax estimation process to what was filed in the income tax return (return to provision).  In the third quarter of 2015, Eversource and CL&P recorded an $8 million and $4.2 million charge, respectively, as a result of reconciling and adjusting its 2014 provision for income taxes to what was filed on its 2014 income tax return.  Concurrently, Eversource and CL&P recorded a reversal of state tax reserves in the third quarter of 2015, which resulted in a $5.9 million and $2.2 million benefit, respectively.


2.

REGULATORY ACCOUNTING


Eversource's Regulated companies are subject to rate-regulation that is based on cost recovery and meets the criteria for application of accounting guidance for rate-regulated operations, which consider the effect of regulation on the timing of the recognition of certain revenues and expenses.  The Regulated companies' financial statements reflect the effects of the rate-making process.  The rates charged to the customers of Eversource's Regulated companies are designed to collect each company's costs to provide service, including a return on investment.  


Management believes it is probable that each of the Regulated companies will recover their respective investments in long-lived assets, including regulatory assets.  If management were to determine that it could no longer apply the accounting guidance applicable to rate-regulated enterprises to any of the Regulated companies' operations, or that management could not conclude it is probable that costs would be recovered from customers in future rates, the costs would be charged to net income in the period in which the determination is made.


Regulatory Assets:  The components of regulatory assets are as follows:


 

As of September 30, 2015

 

As of December 31, 2014

(Millions of Dollars)

Eversource

 

Eversource

Benefit Costs

$

 1,941.8 

 

$

 2,016.0 

Derivative Liabilities

 

 412.8 

 

 

 425.5 

Income Taxes, Net

 

 635.8 

 

 

 635.3 

Storm Restoration Costs

 

 461.3 

 

 

 502.8 

Goodwill-related

 

 490.0 

 

 

 505.4 

Regulatory Tracker Mechanisms

 

 373.1 

 

 

 350.5 

Contractual Obligations - Yankee Companies

 

 142.0 

 

 

 123.8 

Other Regulatory Assets

 

 148.9 

 

 

 167.3 

Total Regulatory Assets

 

 4,605.7 

 

 

 4,726.6 

Less:  Current Portion

 

 653.9 

 

 

 672.5 

Total Long-Term Regulatory Assets

$

 3,951.8 

 

$

 4,054.1 




18



 

 

As of September 30, 2015

 

As of December 31, 2014

 

 

 

 

 

NSTAR

 

 

 

 

 

 

 

 

 

 

NSTAR

 

 

 

 

 

 

(Millions of Dollars)

CL&P

 

Electric

 

PSNH

 

WMECO

 

CL&P

 

Electric

 

PSNH

 

WMECO

Benefit Costs

$

 434.8 

 

$

 486.8 

 

$

 171.1 

 

$

 84.2 

 

$

 445.4 

 

$

 515.9 

 

$

 174.3 

 

$

 85.0 

Derivative Liabilities

 

 406.9 

 

 

 1.4 

 

 

 - 

 

 

 - 

 

 

 410.9 

 

 

 4.5 

 

 

 - 

 

 

 - 

Income Taxes, Net

 

 435.7 

 

 

 83.5 

 

 

 34.2 

 

 

 30.5 

 

 

 437.7 

 

 

 83.7 

 

 

 38.0 

 

 

 35.5 

Storm Restoration Costs

 

 286.5 

 

 

 113.5 

 

 

 36.3 

 

 

 25.0 

 

 

 319.6 

 

 

 103.7 

 

 

 47.7 

 

 

 31.8 

Goodwill-related

 

 - 

 

 

 420.7 

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 433.9 

 

 

 - 

 

 

 - 

Regulatory Tracker Mechanisms

 

 16.0 

 

 

 228.0 

 

 

 85.4 

 

 

 30.1 

 

 

 16.1 

 

 

 141.4 

 

 

 103.5 

 

 

 33.0 

Other Regulatory Assets

 

 84.4 

 

 

 69.6 

 

 

 34.9 

 

 

 12.7 

 

 

 66.1 

 

 

 94.7 

 

 

 41.3 

 

 

 12.9 

Total Regulatory Assets

 

 1,664.3 

 

 

 1,403.5 

 

 

 361.9 

 

 

 182.5 

 

 

 1,695.8 

 

 

 1,377.8 

 

 

 404.8 

 

 

 198.2 

Less:  Current Portion

 

 243.3 

 

 

 223.5 

 

 

 89.5 

 

 

 48.8 

 

 

 220.3 

 

 

 198.7 

 

 

 111.7 

</